Case law, Tamil Nadu land law
Appeal No. 140 of 2021
The Tamil Nadu Real Estate Appellate Tribunal, for Tamil Nadu, Puducherry and the Andaman and Nicobar Islands, issued its decision in Appeal No. 140 of 2021 on 19 January 2022. It set aside the Adjudicating Officer's decision to entertain a homebuyers' refund claim and directed that the Regulatory Authority must decide the refund and related interest, after hearing both sides.
What the case was about
Appeal No. 140 of 2021 arose from a complaint by homebuyers Kannan Ramasubbu and Sharmila Sounddararaj against promoter M/s. Akshaya Private Limited. The homebuyers sought several remedies, including refund of the amount paid towards the sale consideration of a flat.
The promoter challenged whether the Adjudicating Officer could hear the refund claim. The Adjudicating Officer had found the complaint maintainable and dismissed the promoter's preliminary petition in S.R. No. 863 of 2021 in C.C.P. No. 58 of 2021, dated 28 September 2021.
What the Tribunal decided
The Tamil Nadu Real Estate Appellate Tribunal relied on the Supreme Court decision dated 11 November 2021 in Newtech Promoters and Developers Private Limited versus State of Uttar Pradesh and others. Based on that decision, the Tribunal found that refund of sale consideration and interest on the refunded amount must be examined by the Regulatory Authority, not the Adjudicating Officer.
The Tribunal therefore:
- Allowed the promoter's appeal without costs.
- Set aside the Adjudicating Officer's decision dated 28 September 2021.
- Directed the Adjudicating Officer to return the complaint to the Regulatory Authority.
- Directed the Regulatory Authority to take the complaint on file.
- Required the Regulatory Authority to give both sides sufficient opportunity to present their case.
- Required the Regulatory Authority to decide the refund and related interest on their merits under the Real Estate (Regulation and Development) Act, 2016.
- Closed the connected miscellaneous applications.
Who is affected
Appeal No. 140 of 2021 directly affects the named homebuyers and promoter. Its reasoning is also relevant to allottees, promoters and professionals deciding where to present claims under the Real Estate (Regulation and Development) Act, 2016.
For claims seeking return or refund of money, interest on the refund, interest for delayed possession, or penalties, the decision identifies the Regulatory Authority as the decision maker. For claims seeking compensation and interest on that compensation under the provisions discussed in the decision, it identifies the Adjudicating Officer as having exclusive power to determine them.
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Common questions
Can the Adjudicating Officer decide a homebuyer's refund claim?
No. Appeal No. 140 of 2021 states that the Regulatory Authority has jurisdiction to decide refund of sale consideration and interest on the refunded amount.
Was the homebuyers' complaint dismissed completely?
No. The Tribunal directed the Adjudicating Officer to return the complaint to the Regulatory Authority, which must take it on file and decide the refund and interest issues on their merits.
Will both the promoter and homebuyers get a hearing before the Regulatory Authority?
Yes. The Regulatory Authority was directed to give sufficient opportunity to both sides before deciding the refund and related interest.
Who decides a claim for compensation under the provisions considered in this case?
The decision states that the Adjudicating Officer exclusively determines claims for compensation and interest on that compensation under Sections 12, 14, 18 and 19.
